Kyrgyzstan has suspended the SWIFT system and proposed to stop banking operations until the country’s severe political unrest stabilizes. Mass protests broke out after the parliamentary elections, as opposition groups stormed into the government building and forced the prime minister to resign.

Suspension of SWIFT and banking services

The National Bank of Kyrgyzstan announced on Wednesday that as political turmoil intensified, the SWIFT system has been suspended in the country. The central bank also “recommended commercial banks and non-bank financial institutions to suspend activities and strengthen security measures until the political situation in the country stabilizes.”

After the elections in the capital Bishkek, large-scale protests broke out on Monday, leading to the suspension of SWIFT and banking operations. The protesters clashed with security forces and broke into the parliament building and the presidential palace building. Opposition supporters occupied the government building on Tuesday and forced the cabinet to resign. Kyrgyzstan’s President Sooronbai Jeenbekov declared a state of emergency in Bishkek on Friday and said that once a new cabinet is appointed, he is ready to resign.

The official representative of the National Bank of the Kyrgyz Republic, Aida Karabaeva, explained on Wednesday that the temporary suspension of SWIFT and banking activities is aimed at preventing capital outflows from the country, adding:

The measures taken are necessary to ensure system safety and asset safety. National Bank is monitoring the situation, and as the situation stabilizes, the banking system will begin to operate normally.

According to the announcement: “The national payment system’Elcard’ continues to provide the ability to make non-cash payments. Non-cash and remote payment tools can be used for payment and settlement: bank payment cards, electronic wallets, Elcard Mobile applications, QR codes, etc.

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In addition, Kyrgyzstan News Agency reported that Anvar Abdraev, the head of the Kyrgyz Banking Union, said on Tuesday that the ATM had been disconnected and funds had been taken from the machine to prevent operations and robbery.

Experts said: “For small businesses and private transactions, cryptocurrency may be of great help, but warned: “This payment method may not be acceptable for large, especially regulated companies. “In addition, the National Bank of Kyrgyzstan emphasized that even if cryptocurrency transactions exist in the country, they have no legal status.

In August, the Kyrgyz Ministry of Economy drafted a draft law requiring miners to register with the country’s tax authorities and report their activities. In June, the parliament passed the draft law “On the Amendment to the Tax Law of the Kyrgyz Republic” in the third reading. It proposes a 15% tax rate on cryptocurrency mining.

What do you think of the situation in Kyrgyzstan? Let us know in the comments section below.

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